False.
False.
Ya right, ya know, awesome....
http://finance.yahoo.com/news/goldman-sachs-thinks-commodity-deflation-135706559.html
I assume that you're intelligent enough to understand that neither of those articles supports your position.
You are conversing with "The Igy", the thread's resident pessimist and charlatan. Part of his modus operandi is promoting his narrative by misstating the facts in the hopes that no one will call him on it. If called, he will divert, insult, and demean (see above) while possibly providing "proof" of his claim. The "proof" may be an outdated link (see above) or an opinion piece authored by someone with poor investment cred. Typically he does not even read the articles before posting them. One thing for sure, useful facts will be at a minimum.
Welcome to Letsrun. Please don't feed the trolls.
Learn to read first. Second, use some deductive reasoning. Oh, that's too much to ask.
Igy
Facts,
Listen, you gave me just a "False" response with no explanation.
Commodities and energy demand are leading indicators of economic activity. Central bank policy has been aimed at increasing inflation yet global demand has remained very weak. How can one look at record low global interest rates and muted global growth and see something different?
Why, then do you see my analysis as false?
Igy
Your frame of reference is muted. Look at the big picture and you will see your words are folly.
Meaningless response.
Of course. Given your position and apparent history, that is a natural response.
Fact check this awesome one, ya know, like a, wow, really:
http://davidstockmanscontracorner.com/humpty-dumpty-teetering-on-the-eccles-building-wall/
[quote]Facts checked wrote:
Your frame of reference is muted.
English as a second language?
Hi, K5! How come you and Igy always post at about the same time?
How come you have this insane notion I am k5?
One could make the make the bull argument that the ultra low borrowing costs means that corporations will continue to borrow and buy back shares increasing earnings. In fact, I recently read that is what is forecasted to happen. But how sustainable is that? As we get to zero rates there are reports that some banks are experimenting with holding cash and not lend it out at all. Its a more safe, and better return. Its not clear to me what central banks can do to force banks to lend money at zero percent. That could create a tipping point where everyone around the globe is fleeing toward their mattress to hold cash. You hear that a big positive is how well capitalized banks are. But if and when there is a massive flight to cash it wouldn't matter how well capitalized banks are. All the money becomes frozen in bank vaults. A solution seems obvious. When governments are borrowing at negative interest rates, they should borrow and spend it. But politically I don't see that happening for the next year or so unless things turn into a crisis.
Ghost of Igloi wrote:
Ryan,
A couple of points, but I think you have outlined the dilemma. If the Suisse 50 year bond is negative, and the Italian 10 year is at 1.2% odds are Treasury yields will remain low in this environment. The TINA argument is baloney and there is no historical data that supports it. Furthermore the Fed Model has one of the poorest correlations to subsequent market return. So the high quality bond ballast is a portfolio anchor. The question would be what percentage? Unfortunately the best portfolio protection comes from low yielding high quality short duration bonds and money market.
How much income and principal from bond proxies can be whipped out in a severe downturn? If you want an example, just look at AMLP, the Alerian Fund oil and gas MLP.
Igy
Ryan,
I read the same arguments which I lump together in the category of "this time is different." To clear the baloney away one has to define what a stock or bond really is. Both are claims on a stream of cash flows paid to investors over time. If a company is buying back their stock that capital expenditure has done nothing to improve the earnings capacity of the company. In fact it is exactly the opposite, they have leveraged their future earnings capacity for a facade of growth. Bonds trading at historically low interest rates is a bet that central bank policies will continue to suppress price discovery. Who in their right mind would lend money for 50 years at a negative rate?
Of course one can continue to pick-up pennies in front of a steam roller. The facts are earnings are declining globally, their is broad weakness in certain sectors, regions and capitalization. The slightly positive year over year returns for the Dow and S&P 500 masks a most unstable and dangerous investment environment. And that goes for most asset classes.
The environment is most bizarre. Little of the conventional advice makes sense when measured against rational thinking or historical data. Investors are essentially making a bet that they can sell their stock or bond at the opportune time. It rarely is that easy and for every lucky investor there has to be an unlucky one. Someone has to own each stock or each bond until they are retired or mature.
In regards to governments spending, there are several examples of nations that can never repay their debt. At some point markets will reveal the "Come to Jesus" moment, and it won't be pretty.
Lastly, keep in mind how wrong people have been twice in the last 16 years. Use your brain, if the math doesn't add up, let it go. Patience is more than a virtue, in this environment for investors, it is required.
Igy
Ghost of Igloi wrote:
Fact check this awesome one, ya know, like a, wow, really:
http://davidstockmanscontracorner.com/humpty-dumpty-teetering-on-the-eccles-building-wall/
David Stockman? I thought you were serious. Good one.
I am serious, you could learn something awesome one.
If you're serious, which I doubt, then you're a noob. I'm in the business and no one - NO ONE - takes that guy seriously. He is a laughingstock as are the dim witted ones who read his tripe. You would be well advised to move on.
Commodities, energy, global bonds all experiencing deflation.
Nope.
http://www.cnbc.com/2016/06/16/this-chart-predicts-a-rise-in-inflation-technical-analyst.html